Assignment task: Rental Property, Capital Allowances
Alf Ericsson, a resident Australian taxpayer, owns a house in Sydney from which he derives rental income.
During the tax year, Alf had the following transactions in relation to the property:
RECEIPTS $
Rent Received (net of $940 agent's commission) 24,660
Water Rates Recovered 515
Lease Preparation Fee Recovered 15
PAYMENTS
Agents' Commission 940
Letting Fee 300
Lease Preparation Fee 30
Bank Charges 83
Mortgage Repayments 12,800
Council Rates 1,220
PAYG tax instalments paid 4,200
Insurance 410
Land Tax 1,930
Replacement of broken window (1 May 2024, effective life 5 years) 205
Air Conditioning (28 February 2024, effective life 10 years) 2,700
New Light Fitting (30 April 2024, effective life 5 years) 250
Water Rates 920
Other Information
>Mortgage Repayments were made in respect of: Principal $
Principal $ 3,200
Interest $ 9,600
>On 30 April 2019, borrowing costs of $950 were incurred on the mortgage, which has a term of 20 years.
>Alf wishes to use the Commissioner's estimates of effective life.
In addition, Alf had maintained a schedule from previous years of depreciable assets that he has acquired for the property:
Asset Cost($) Written Down Value($) Effective Life(Years) Depreciation Method
Hot water Service 1,800 1,500 12 Prime Cost
Carpets 3,800 2,900 10 Diminishing Vale
Blinds 1,300 1,050 10 Diminishing Vale
Calculate Alf's net rental income from the property that he would include as part of his taxable income for the 2023/24 tax year.